FY03/22
Financial Results Briefing for the First Six Monthsof the Fiscal Year Ending March 31, 2022

October 29, 2021 (Friday)
TOKAI Holdings Corporation(Code No. 3167)

AgendaI. Outline of Financial Results for the First Six Months
II. Full-Year Forecast
III. Progress of Medium-Term Management Plan,
IP24 “Design the Future Life”(Contact for inquiries)
Investor Relations Office, TOKAI Holdings Corporatione-mail: hd-info@tokaigroup.co.jp
TEL: +81-(0)3-5404-2891
1

Overview of Financial Results for the First Six Months of
the Fiscal Year Ending March 31, 2022

2

Overview of Financial Results for the First Six Monthsof the Fiscal Year Ending March 31, 2022
Sales hit a record high of 96.1 billion yen
 Sales rose 6.2 billion yen (+6.9%) year on year, increasing for the first time in two periods and hitting a record high In addition to increases in the number of customers and expansion of the Information and Communications business, M&A in theConstruction, Equipment, and Real Estate business contributed to growth

Operating profit was 5.2 billion yen, almost on a parwith that of the same period of the previous year Increase in the number of monthly fee-paying customers and an increase in profit in the Information and Communications
business
 Increase in expenses associated with proactive steps to gain LP gas and Aqua customers, and incurrence of expenses toimprove the working environment as part of work-style reform.

Core businesses saw expansion in continuing
customer number
 Continuing customer count reached 3,125,000, up 26,000 from 3,100,000 at the beginning of the year Number of TLC members topped 1 million, rising 44,000 to 1,023,000

3Forecast for the Fiscal Year Ending March 31, 2022

4

Both sales and profits are projected to hit record highs
 The consolidated earnings forecast for the fiscal year ending March 31, 2022 projects record-high sales andprofits (initial forecasts remain unchanged)
 Looking at progress made during the first half, net sales, operating profit and recurring profit all surpassed internal
projections Net income was almost in line with internal projections despite the recording of a temporary extraordinaryloss The number of customers, which underpins earnings, fell short of the internal plan but, in the second half, moremoney than initially projected will be spent on efforts to gain new customers, aiming to achieve a customer count of
3,200,000 at the end of the fiscal year

(First-Half Results)
Net sales

Operating profit

Recurring profit

Net income

Customer numbers

96.1

5.2

5.3

2.3

3,120,000

billion yen

billion yen

billion yen

billion yen

More thanprojected

More thanprojected

More thanprojected

In line withprojections

Less thanprojected

Recurring profit

Net income

Customer numbers

3,200,000(Full-Year Earnings Forecast)
Net sales

Operating profit

207.0

15.2

15.3

8.8

billion yen

billion yen

billion yen

billion yenMore money than initially projected will be spent on efforts to gain new customers
but both sales and profits are projected to hit record highs5Progress of IP24 “Design the Future Life”

6

Announcement of new Medium-TermManagement Plan, IP24 “Design the Future Life”
April 2021
10th Anniversary of Start of Operations
under Holding Company StructureFirst Step Towards Next 10 Years

May 2021

New Medium-Term Management Plan
Announcement of IP24 “Design the Future Life”
7

Future Vision of the Group The environment surrounding businesses is changing dramatically, with lifestyle changes associated withCOVID-19, global pressure to contribute to the SDGs, the trend towards clean energy, and digitalization
 In response to such environmental changes, the Group aims to become a Life Design Group, a corporategroup that continues to grow sustainably and create people’s lifestyles over the next 10 years

Environmental changes
Lifestylechanges associatedwith COVID-19

Global pressure tocontribute to SDGs

Trend towardclean energyDigitalization

A corporate group that continues to growsustainably and create people’s lifestyles
The Group ten year vision“Life Design Group”

8Towards further enhancement of TLC
 In the past, the TOKAI Group has provided lifestyle infrastructure services mainly within each household, inaccordance with the Group’s “Total Life Concierge (TLC)” vision.
 Going forward, the Group will move beyond lifestyle support and contribute to solving social issues by detecting
customers’ potential needs and designing new lifestyles. Based on this approach, the Group will aim for further
enhancement of TLC

Wedding

Insurance

Electricity

LP gasAqua

Total Life Concierge
City gas

Nursingcare

Housing

CATV

AffordablemobileSecurity

Internet“Life Design Group”
Contribute to solving social issues by designing new lifestyles for customers.
Based on this approach, take first step toward further enhancement of TLC.

9Positioning of IP24 “Design the Future Life”
 Medium-Term Management Plan as First Step Towards Achieving 10-Year Vision of Becoming a “Life Design Group”
 The Group will build on the growth achieved in the 10 years since the establishment of a holding company structure
to shift to sustainable corporate growth and positions the four-year period from FY2021 to FY2024 as the “Stage forbuilding the base for realizing Life Design”

Innovation Plan 2024

Life DesignGroup“Design the Future Life”

Stage for building the base forrealizing Life DesignAim to doubleearnings
Shift to sustainablecorporate growth

2011.4
Holding company structure

Innovation Plan 2020 “JUMP”
Innovation Plan 2016 “Growing”
Innovation Plan 2013

10

Five Key Messages under IP24
 Five Key Message under IP24 “Design the Future Life”

1. Implementation of the LNG strategy
2. Evolution of TLC (Digital Marketing & Open Innovation)
3. Stepping up of DX strategy
4. Optimal allocation of management resources
5. Strengthening of SDG initiatives
11

Implementation of the LNG strategy

12

Steady Expansion of Customer Basein Core Businesses
 Customer numbers, which underpin earnings in the core gas, CATV and Aqua businesses, will increase by 26,000
 In LP Gas business, a sales base was opened in Kumamoto City, Kumamoto Prefecture in October 2021 In addition,
expansion into Hiroshima Prefecture by January 2022 is also under consideration
 Further increases in customer numbers will be made, aiming to achieve goal of 3.56 million at the end of FY2024
LP Gas business - existing area

GasCATVAqua

LP Gas business - new area
LP Gas business - plannednew area

Kumamoto(October 2021)

Hiroshima(January 2022 -plan)+20,000+17,000+3,0003.56 million

Net increase
3,125,000
of 26,000

3,099,000

FY2020

FY2021_2Q

FY202413

New Direction in ICT Business Offering a one-stop shop for Amazon Web Services (AWS) covering all processes from consulting to design,construction, connection, monitoring and operation, in the ICT business for corporate customers
 Already provided cloud computing support to many customers since achieving AWS certification
 Leveraging this track record and experience to begin offering AWS Solution for China Region to support use of AWS
by Japanese businesses with a local subsidiary in China from September 2021

(i) AWS China Region Adoption Support Service(ii) AWS China Region Account Creation Support Service(iii) AWS China Region Operations Management ServiceAWS Ningxia Region

AWS Beijing Region

AWS Tokyo Region
AWS Osaka Region(v) AWS China Region
Connection service

Customerbase
Customerbase(iv) ICP Registration
Support ServiceCustomer
base

Customerbase

14(vi) Remote Connection Service

Further Growth and Expansion as an
General Construction Business Operator Made Marco Polo, Inc., which is engaged in the large-scale repairs business in Aichi Prefecture, into a consolidated
subsidiary in April 2021
 Enhanced the structure for winning orders for major construction work in the Construction Business of theConstruction, Equipment and Real Estate Segment by making civil engineering company Nissan Kogyo andelectrical contractor Chuo Denki Koji into consolidated subsidiaries in 2019 and 2020 respectively
 Drawing on the strengths of each to create synergies, aiming for further growth
Civiland expansion as general construction business operator
engineering
workLarge-scale

Nissan Kogyo Co., Ltd.

Marco Polo, Inc.

repairs

Major works in theConstruction BusinessAirconditioning
workElectricalwork

Plumbingwork

ShizuokaPrefecture

Chuo Denki K.K.

TOKAI service area

Aiming for further growth andexpansion as a general
construction business operator

15

Further Expansion of ICT Business Made Query Co., Ltd., which is engaged in the system development business, into a consolidated subsidiary in April
2021
 QUERY’s strengths are its technological capabilities that can flexibly respond to customer needs and the longstanding relationships of trust with major customers, built through its numerous development and operation results
 Aiming to provide added value to customers and expand transactions by creating synergies through the combinationof QUERY’s technological capabilities and relationships of trust with integration of the cloud and networking areas,
which is TOKAI’s strength

M&A Network line services
 Data center operation services
 System development

 Development of Smartphone andTablet Applications
 System Integration Business Web and DTP production
 Technical staff dispatch

Create synergies by combining the strengths of both companies
Aim to increase added value provided to customers and expand transactions

16

Evolution of TLC

17

Promotion of Digital Marketing Promoting digital marketing to identify potential needs of customers and design and suggest new lifestyles
 Utilizing D-sapiens, a data analysis platform which centrally manages the data of 3.1 million customers nationwide,
to deepen customer understanding and suggest the optimal services for customers, aiming to increase added value
and improve the customer experience Specific examples include an AI-based initiative for detecting precursors of service cancellation and a Thanksgiving
website where non-face-to-face is possible.

Suggesting the optimal services to customers
aiming to increase added value and improve customer experience18

Stepping up of DX strategy

19

Implementation of DX Strategy
 Formulated Digital Transformation (DX) Strategy to coincide with announcement of IP24
 For the DX Strategy, fully utilize data of more than 3.1 million customers nationwide accumulated through businessactivities and ABCIR+S*
 Planning to further advance the optimization of existing business models and achieve improvement in businessefficiency and high added value in our services. Also intending to take on challenges to create new businesses.

D-sapiens

ABCIR+S* Term coined by combining A for AI, B for Big Data, C for Cloud, I for IoT, R for Robotics,and (+) S for Smartphone. It is the Group’s strategy for digital technology innovation.

Improvingbusiness efficiency

High added value

Creating
new businesses

Increasing Productivity and Improving
Business Efficiency throughthe Digital Workplace

Pursuing customer understanding
and improving the customer
experience through D-sapiens

Providing new value throughcollaborations and co-creation
with start-ups, etc.

20Optimal allocation of management resources

21

Optimal Allocation of Management Resourcesin Line with Plan Appropriated 9 billion yen out of the 11.4 billion yen in cash flows provided by operating activities in 2Q for
investments in future growth including investments in existing businesses and acquisitions of new subsidiaries
 Shared the benefits of growth with shareholders by paying a dividend of 30 yen (2.1 billion yen in total), an increase of
2 yen from the previous fiscal year Plan to continue striving for optimal allocation of management resources with a view to actively investing in growth andimproving shareholder value

Improvement ofShareholder
shareholder
returnFY2020 year-end dividends
value
2.1 billion yen

FuturebusinessgrowthInvestment
in growth
Existing businesses:
6.3 billion yen
M&A: 2.7 billion yen

9.0 billion yen

Management
resources
Operating CF*: 11.4 billion(FY2021) 21.8 billion (projection)** Projected operating CF is calculated as follows:
Operating CF = Operating profit + Depreciation– Lease payment – Tax payment

22

Strengthening of SDG initiatives

23

Carbon Neutrality Vision
Announced TOKAI Group Carbon Neutrality Vision in May 2021

The Group will further promote the use of environmentally friendly energy equipment and also utilize renewableenergy and electric vehicles in its business activities to reduce CO2 emissions and aims to achieve carbon
neutrality by 2050

2020
▼

2030
Be proactive in reducing CO2 emissions.
However, gas will continue to play an important role for
ensuring resilience in disasters, etc.

▼2050
Achieve carbon neutrality by introducing
innovative technologies.

Reduce CO2 from business operation・ Use ABCIR+S (automatic meter reading, optimization ofdelivery routes).
・ Reduce CO2 emissions from offices.

Reduce CO2 from houses using gas
・ Promote high-efficiency gas equipment.
・ Promote solar power generation systems for households.
・ Promote equipment related to electrification.
・ Make houses carbon neutral (ZEH, OTS).

Reduce CO2 emissions from our own
business activities by 13,000 tons.
(Equivalent to 70% of CO2 emissions in FY2020, which
was 18,000 tons）

Promote high-efficiency gas equipment
for households, install solar power
generation systems for households,
and take other steps to reduce CO2emissions by 170,000 tons.
(Equivalent to 50% of CO2 emissions from householdgas, which is 360,000 tons)

Carbon neutrality

FY2030 targets▼

Expand electric power business・ Launch electricity retail business.
・ Offer electricity and gas packages widely.
・ Use renewable energy power sources.

24

Start of Sales of Carbon Neutral Gas
 Started selling carbon neutral gas in the City Gas Business in August 2021. Carbon neutral gas achieves net zero
emissions by using the J-Credit Scheme to offset CO2 emissions
 Supporting the efforts of local governments and businesses to reduce GHG emissions through the sale of carbon
neutral gas, aiming to help local communities reduce their environmental impact and achieve more widespread use ofcarbon neutral gas
 Concluded a Collaboration Agreement for the Realization of Zero Carbon City with Fujieda City (Shizuoka Prefecture),
which has declared its intention to become a Zero Carbon CityJ-Credit
Creator

TOKAI Group
companies

CustomerBusinesses involved in forestry
management and theinstallation of energy-saving
equipment
Creators conduct businesses
which either reduce GHGemissions or help increase
the amount of GHG
emissions that are absorbed

Local governments andbusinesses working to reduce
their GHG emissions

Purchase ofcredits

Sale ofcarbon
neutral gas

Customer offsets own GHG
emissions with credits to“reduce” emissions

Fujieda City, Shizuoka Prefecture* Scheme under which the government certifies the amount of greenhouse gas
emissions reduced through the introduction of energy-saving devices or the use ofrenewable energy or the amount of greenhouse gas emissions absorbed throughproper forest management, as “credit.”

Conclusion of Collaboration Agreement for Realizationof Zero Carbon City・ Promotion of decarbonization and energy conservation
・ Encouragement of widespread use of carbon neutral gas25

Start of Provision of TOKAI ZERO SOLAR
 Began offering TOKAI ZERO SOLAR, which allows solar power generation systems to be installed at an upfront costof ¥0, in October 2021
 The widespread adoption of solar power generation is important to improve energy self-sufficiency and realize a lowcarbon society
 TOKAI bears all the initial installation cost and service users benefit from lower utility bills for the duration of the service
Another benefit to customers is that ownership of all the equipment is transferred to them free of charge at the end of
the contract period and the service helps reduce CO2 emissions

Promoting solar power generation
to reduce CO2 emissions

Revenue from electricity sales

Transferred free of charge
after contract period

Shortfall is purchasedfrom power company

Solar selfconsumption
Payment of service charge according
to level of self-consumption

Lower utility bills

26

Realization of Flexible Ways of Working
through Work Style Reform Introduced new ways of working, consisting mainly of teleworking, in April 2021, with the payment of work-from-homeallowance and development of the digital workplace in addition to the provision of equipment (smartphones andcomputers)
 Made steady progress towards achievement of targets of 50% office attendance rate and 40% reduction in office floorarea Also made progress on improving business processes including going paperless and considering introduction ofan electronic seal system
 Plan to implement work style reform, aiming to realize flexible ways of working and achieve the career advancement ofdiverse human resources

Introduced teleworking from April 2021, aiming to have 50% of employees
working in the office and to reduce office floor space by 40%
Threeessential tools

Payment ofwork-fromhome allowance(1) Lending smartphones(2) Lending PCs(3) Free address office

Going paperless

Development ofdigital workplace
Environment that permits
employees to work comfortably
and safely anytime, anywhere,
through digitalization

Introduction of electronic
seal system

Implementing work style reform to realize flexible ways of working andachieve the career advancement of diverse human resources27

Strengthening the governance system
 Strengthened the governance system to achieve sustainable growth and improve the corporate value over the medium
to long term Established Nomination and Compensation Committee in February 2021 in addition to governance framework alreadydeveloped, to further strengthen the independence, objectivity, and accountability of the functions of the Boardof Directors
 Independent directors make up at least one third of the Board and female directors are also appointed

Nomination andCompensation
Committee

EnvironmentalManagementCommittee

Strengthened independence,objectivity and accountabilityof the functions of theBoard of Directors

Investment
Committee

Strengthening
the governance system
BusinessManagement
Committee

Group Compliance& Risk Management
Committee

Reviewing
the director
composition
 Independent directors make up at least one third Female directors are also appointed

28

Finally

We are steadily laying the foundations forachieving the five key messages under IP25

We are setting a clear path towards
realizing our 10-Year Vision ofbecoming a “Life Design Group”
29The performance forecasts and forward-looking statements in these materials are based on
information currently available to the Company, and include potential risks and uncertainties.
Please be aware that due to changes in a variety of factors, actual results may differ
materially from the projections and other forward-looking statements in these materials.
Amounts are rounded down to the nearest hundred yen. Other figures are rounded off.

Please contact us with any questions regarding these materials.
Investor Relations Office, Tokai Holdings Corporation
Hamarikyu Intercity 11F, Kaigan 1-9-1, Minato-ku,
Tokyo Prefecture 105-0022
TEL: +81-(0)3-5404-2891
FAX: +81-(0)3-5404-2786
https://www.tokaiholdings.co.jp
e-mail: hd-info@tokaigroup.co.jp